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Electronics Production | March 15, 2005

Great problems with design outsourcing

According to a study, made by EETimes and Electronics Supply and Manufacturing, outsourcing design will not allways gain efficiencies. The electronics companies are facing several difficulties by outsourcing their design.
The main reason for the electronics providers to outsource their design has been to cut their costs but the locations where the design has been taken are not what many people think, to lower cost regions. The main location for the outsourced design is the USA. About 80% of all outsourced design goes to the US. The study has shown that several companies faced problems like: The project took longer than first thought, communications problems with third party, higher total costs than anticipated and the third party lacked management ability.

The most popular design activities to outsource are Software design, Board level design and Chip level design.

Of all electronics providers only 59% outsource any kind of design activities. For larger companies that number rises to about 84%.

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